PSE Circular for Brokers No. 3047-99

November 29, 1999 PSE CIRCULAR FOR BROKERS NO. 3047-99 The Philippine Stock Exchange Listing and Disclosure Group 4th Floor, Philippine Stock Exchange Centre Exchange Road, Ortigas Center Pasig City Attention: Ms . Luisa W . Buenaventura Supervisor, Disclosure Dept . Dear Sir: In connection with your fax today, this is to inform you that news reports that CDC has already joined PICOP as a new partner at this time is premature and speculative. While various parties have shown interest and possible participation in PICOP, the Company has not, as of this time, made a decision on which party and mode of alliance it will go into. We expect however that interest on PICOP will increase a substantial progress is made on product quality, cost competitiveness and financial condition. Rest assured that we will keep the PSE informed on any material development in this area. cdlex Very truly yours, (SGD.) EMMANUEL A. RAPADAS Chief Financial Officer Picop takes new partner Listed paper and timber products producer Picop Resources. Inc. has reportedly tapped British-based Commonwealth Development Co. (CDC) as partner for its P2.7-billion paper division which is being spun-off by the company. LexLib A Business World source said Picop's new partner is seen to bring in between P750 million and P1 billion in fresh capital, making CDC a 35%-owner of the paper company. prcd Based on the agreement, the British firm will be issued a five-year, 9% convertible notes in exchange for 30% to 35% of the new paper firm. Picop reportedly plans to use 50% of the proceeds to retire P1.3 billion worth of consolidated debts. Picop will also keep its "high-yielding" timber operations once the sale of its paper operations proceeds. As much as 65% of Picop's gross profit comes from the company's timber business. The firm also plans to allot P150 million for capital expenditures next year. prcd Picop posted a net loss of P25.27 million as of the third quarter of the year, 76% lower than the P105-million loss registered in 1998, citing improvements in the paper and timber businesses. llcd Likewise, substantial gains were achieved in fiber cost, power and services utilization efficiency. The company likewise obtained savings from lower interest rates this year, 23% lower to P58 million from P75.9 million as of the first nine months of last year, the company said in a report to the Philippine Stock Exchange.